Bankruptcy Student Loans – Are They Included?

Are you worried about how to pay off your student loans? Do you want to know more about bankruptcy? You’re not alone. Each month, more than 170,000 people visit our website to learn about debt solutions.

In this guide, we’ll talk about:

  •  What bankruptcy is
  •  How to decide if bankruptcy is the right choice for you
  •  How to apply for bankruptcy and how much it might cost
  •  How bankruptcy can affect your life and credit rating
  •  Other ways to help you pay off your debt

We understand your concerns; some of us have had the same problems with debt. But don’t worry; we’re here to help you learn more about bankruptcy, student loans, and other ways to deal with debt. 

Can you declare bankruptcy on student loan debt?

Even if you have finished your bankruptcy, youll still have to repay any student loan debt (and interest) you have with the UK Government. But as this debt is only repaid after you earn a certain amount each tax year, you wont have to repay if you are unemployed or a low-income earner.


Why are student loans not dischargeable in bankruptcy?

There is no certain answer to why you still have to repay your student loan after you are discharged. But it is arguably because it is a payment from the UK Government – and because you will not have to repay the debt unless you earn above the threshold.

Students are either on repayment Plan A or repayment Plan B. Those on the former only repay 9% of earnings above £382 per week, while those on the latter repay the same amount over £524 per week. 

Will a DRO cancel student debt?

With that in mind, you may be wondering if a Debt Relief Order will write off your student loan debt where bankruptcy cannot. Unfortunately, DROs also wont cancel these debts. 

How do you get your student loan forgiven?

Unlike many other countries, the UK will write off student debt after so many years. When your debt is written off depends on when you received the loan, i.e.:

  1. Between 2005 and 2006 or earlier – at the age of 65
  2. After 2006 – after 25 years from the first of April, you are due to repay
  3. Plan 2 – after 30 years from the first of April, you are due to repay

For many people with student debt that have not been earning enough to make significant contributions they are likely to have some of this debt cancelled. For that reason, in these cases, making voluntary contributions is not worthwhile. 

What debts are not wiped out by bankruptcy?

Bankruptcy will not free you from your student debt, and there are other debts that are not covered by bankruptcy. For example, if you have any of the following debts, youll still be responsible to repay even after being discharged:

  1. Social fund loan debts
  2. Fines to the Magistrates Court
  3. Money owed from a confiscation order (such as drugs)
  4. Child support and maintenance debt
  5. Financial compensation you have been paying due to injuring another person

You can apply to the court for the latter two debts on that list to be wiped. Youll also need to keep making mortgage payments if applicable, as this is a secured debt. 

Will bankruptcy cancel joint debts?

If your bankruptcy includes a joint debt, the creditors can then chase the other individual for all of the money. You could both apply for bankruptcy (if both are suitable), and the debt may be written off eventually. However, there is no such thing as joint bankruptcy. Youll have to apply for your bankruptcy separately and pay the bankruptcy fees each. 

Bankruptcy and fraudulent debts 

If you owe payments on credit you accessed through fraudulent means, these will not be written off within your bankruptcy. Youll be responsible for paying these creditors after the bankruptcy has been completed. And you may face other court action. 

If you want free personal debt advice on any topic, from bankruptcy to court proceedings or just help manage your money, you can always call a debt advice charity. 

Learning skills to be financially literate will help you avoid debt worries in the future and help with future planning.

They will offer private and expert support and guidance in any debt situation or when taking on your creditors!

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